2 days ago
More than 130 years later, this pragmatic trust still offers something new
Questor is The Telegraph's stockpicking column, helping you decode the markets and offering insights on where to invest for the past six decades.
The UK equity market has been a happy hunting ground for income-seeking investors, and it continues to offer a yield premium to other developed equity markets. However, more recent events, particularly across competing income-producing asset classes, have shifted the emphasis for equity income investors towards total returns, dividend growth and the benefits of a pragmatic approach to stock selection.
In the context of an evolving landscape of UK equity income strategies, few names stand out as consistently as Law Debenture. This venerable institution, with almost 136 years of history, combines an actively managed UK equity investment portfolio with the robust growth of its wholly-owned independent professional services (IPS) business, which is comprised of three divisions – pensions, corporate trust and corporate services. This combination creates a unique structure that supports the trust's history of consistent outperformance.
The investment portfolio is managed by the experienced Janus Henderson duo of James Henderson and Laura Foll, and benefits from a contrarian and value-focused style. The investment approach followed by Henderson and Foll is unconstrained by the equity income mandate, can invest across the market cap spectrum and targets companies trading at reasonable valuations with conservative balance sheets and experienced management teams.
One of the standout features of Law Debenture is the IPS business, which accounts for around 19pc of its net asset value (Nav) and has funded approximately 30pc of its dividends over the past decade. IPS has delivered mid-to-high single-digit growth and around two thirds of IPS revenues are recurring.
